Estimate overnight holding costs and credits
| Day | Long | Short | Multiplier |
|---|---|---|---|
| Weekly Total | — | — | 7 nights |
A swap (or rollover fee) is charged when you hold a forex position overnight, past the daily rollover time (typically 5 PM New York time). It reflects the interest rate differential between the two currencies in the pair you're trading.
The formula is: Swap = Swap Rate (points) × Lot Size × Pip Value / 10
Swap can be positive (you earn) or negative (you pay). When you buy a currency with a higher interest rate than the one you're selling, you receive a positive swap — this is the basis of carry trading strategies.
Every Wednesday, brokers charge triple swap to account for the weekend (Saturday and Sunday). This is because forex settles on a T+2 basis — a Wednesday trade settles on Friday, so the rollover must account for Saturday and Sunday holding. For indices and some commodities, triple swap may fall on Friday instead.
Some brokers offer Islamic (swap-free) accounts that don't charge or credit swap fees. However, these accounts may have alternative charges such as administration fees or wider spreads.